07 February 2017

Student living can put parents on a budget

Nationwide research* has revealed that parents, not students, are the ones curbing their costs to pay for university life. But when it comes to helping your son or daughter to get into good financial habits, it can pay in the long run to learn when to say ‘no’.

We all make sacrifices for our children – whether it’s staying up all night to finish a Halloween costume or dropping everything to provide free taxi services.

But if you’re among the two-thirds of parents cutting back your own lifestyle to support your son or daughter financially at university, it might be time to consider tightening your purse strings.

Apart from the personal impact for those parents borrowing money or getting into debt (15%), taking a second job or delaying early retirement (14%), saying ‘no’ gives children the incentive to manage their money themselves.

How to know when to say ‘no’

So before reaching for your chequebook – or, more likely, your mobile phone – ask yourself four questions:

1. Why does my child need the money?
Is it a one-off oversight or monthly occurrence? We all want to support our children, but handing over cash with no questions asked will not teach them to be self-sufficient. Instead, try to get to the root of the problem – it may simply be that their course books are more expensive than anticipated, or you may find that they’re ignoring the budget that you carefully set together. 

2. Have they made any sacrifices?
Have they tried to resolve the problem themselves before coming to you, by asking for extra hours at work or saving on café lunches and coffees?

3. Can I afford it?
Make sure that any financial help you offer doesn’t put pressure on your own situation. Remember, there are plenty of ways that you can help which won’t cost you: perhaps they need help rethinking their budget, getting a job or they could save money by moving back home temporarily?

4. Is it a gift or loan?
If you are going to help out, be clear about whether – and when – you expect it to be repaid. Help your child to work out where they can save each month to meet the repayments.

‘Help’ doesn’t always mean hand-outs

So instead of joining the one in five who would delve into their pockets before asking any questions, consider the other ways in which you might be able to help your child ease their way into good financial habits. After all, 54% of students admitted that their money management skills came from their parents.

The first step to help your child stand on their own two feet financially is encouraging them to set a realistic budget that they can stick to. But the second is to make sure that they know where to turn for support while they’re still learning to look after their money.

It’s a good idea to reinforce that they can always come to you if they find themselves in a tight spot. But it can be surprisingly tough for your newly-independent son or daughter to ask a family member for advice.

When we launched our FlexStudent current account, we developed a range of interactive education support tools to help make getting to grips with independent living easier for your child. They’ll find easy-to-understand information on every aspect of student life, including: budgeting (and a free budget-planner), choosing a student account, dealing with cash-flow concerns and keeping their money safe.

*Research from Vital Research and Statistics: total sample size was over 1,000 UK students and parents (614 parents of children who are about to go, currently at or recently graduated from university – survey ran from 01/08/16 to 08/08/16 and 400 undergraduate students aged 18 to 25 – survey ran from 01/08/16 to 16/08/16). 

To open a FlexStudent account you must be 18+, accepted on a full-time UCAS course of at least 2 years and be within 2 months either side of your course start date. This must be your only student account.

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